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Switzerland in the age of automatic exchange of banking information

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Re: Switzerland in the age of automatic exchange of banking information

#101

Post by cm2187 »

fhrow4484 wrote: post #71
andylynch wrote: post #64

Earlier quoted context omitted.

Maybe the US could look to France again - since they do just this in their National Assembly, and also have representatives for citizens aboard in the Senate https://en.m.wikipedia.org/wiki/Constituencies_for_French_re...

Maybe France could not look at the US and also start taxing citizens everywhere in the world: https://www.google.com/amp/s/www.boursorama.com/actualite-ec... (french source)

That’s pretty bad, you could end up with two countries claiming you are fiscally resident in their country at the same time.

France has actually considered taxing French citizens abroad like the US. It comes regularly during presidential campaigns. I think the last serious attempt was Hollande. They backed down because it would require to renegotiate every tax treaty and they didn’t want to open that door.

But I think it will happen one day.

Re: Switzerland in the age of automatic exchange of banking information

#102

Post by jwr »

jimhi wrote: post #87
jjcm wrote: post #58

Earlier quoted context omitted.

For myself (a US citizen living abroad), my biggest annoyance isn't that I'm taxed on my income overseas, it's that it effectively is taxation without representation. Even though I'm paying tax overseas, there's no US Representative who fights for my interests. I have one who fights for the interests of the residents of a district I lived in years ago, but I have no relation to that anymore. I have a US senator who f…

I am also a US citizen abroad and I don't understand your annoyance. This is exactly why Foreign Earned Income Exclusion exists. For anyone not aware you don't pay taxes on 100k if you are out of the USA 330 days out of the year. 200k if you are married. Do you qualify? Then you are exempt from such a ridiculous amount that it is hard to argue this. Or maybe you visit the USA too much to qualify? In which case you do…

I do understand the annoyance. The $100k exclusion, as others have mentioned, is not a "ridiculous amount", it's all relative to where you live and how much you earn.

You might also think it is "ridiculous" because you only earn money from a paycheck (e.g. you are an employee). For the self-employed things look very different: your revenue might easily be $200k, while your actual income is half that. Your foreign business pays taxes on income, but claiming the same deductions in the US might be difficult or impossible, so you might end up paying taxes on your $200k of revenue.

More importantly, though, the amount of paperwork that the US requires (FATCA and FBAR reporting) is ridiculous. And preparing your US taxes if you are an expat is a minefield, there is no way you can do it yourself. You need help from experienced tax accountants. All in all, it is a significant burden.

Re: Switzerland in the age of automatic exchange of banking information

#103

Post by huhtenberg »

zhdc1 wrote: post #90
dbrgn wrote: post #9

To me as a Swiss citizen, born in Switzerland, living in Switzerland, it's an impertinence that every time I open a bank account with a Swiss bank I have to fill out at least 1 form with information about my relation to the US, about my travels in the US and whether I might have to pay taxes there. As a side note, the only other country besides the US that collects taxes based on citizenship and not based on residenc…

As an American citizen living in Switzerland, it's somewhat of an impertinence that I'm essentially limited to using one bank - Post Finance - when Germany and a number of other countries with large expat populations here now ask for and receive the same information on their citizens. Edit: I also want to add that you're referring to income taxes. Several European countries collect wealth tax on global assets.

> limited to using one bank

An easy solution is to trade your US citizenship to a Swiss one. It takes just 5 years on permit C.

> Several European countries collect wealth tax on global assets.

Including Switzerland.

Re: Switzerland in the age of automatic exchange of banking information

#104

Post by anothermouse »

jimhi wrote: post #87
jjcm wrote: post #58

Earlier quoted context omitted.

For myself (a US citizen living abroad), my biggest annoyance isn't that I'm taxed on my income overseas, it's that it effectively is taxation without representation. Even though I'm paying tax overseas, there's no US Representative who fights for my interests. I have one who fights for the interests of the residents of a district I lived in years ago, but I have no relation to that anymore. I have a US senator who f…

I am also a US citizen abroad and I don't understand your annoyance. This is exactly why Foreign Earned Income Exclusion exists. For anyone not aware you don't pay taxes on 100k if you are out of the USA 330 days out of the year. 200k if you are married. Do you qualify? Then you are exempt from such a ridiculous amount that it is hard to argue this. Or maybe you visit the USA too much to qualify? In which case you do…

I'm married to a US citizen. My children have inherited US citizenship via this route. We have to spend thousands preparing tax returns reporting no income each year for three people (the children have bank accounts).

  If you buy a house, things are going to be complicated.
  If you have a workplace pension from your job, you're probably screwed. State pensions have screwed people too.
  If you invest in stocks, or mutual funds, you'll pay more in tax preparation than you'll make.
  If you set up your own company and are not paid as an employee but as the owner, you will be screwed.
  Rent out a property, screwed.
  Fail to declare every account that you're a signatory on? Prepare to pay up to 125% of the contents. 
  If you're children are beneficiaries of a trust set up by their non-american grand-parents? Totally screwed.
Almost every American expat I've spoken to has had a shock when they find they totally didn't understand their commitments. The only ones who didn't were employees of big banks/hedge funds whose employers paid a big 4 accountant to take care of everything.

Re: Switzerland in the age of automatic exchange of banking information

#105

Post by mnky9800n »

jwr wrote: post #102
jimhi wrote: post #87

Earlier quoted context omitted.

I am also a US citizen abroad and I don't understand your annoyance. This is exactly why Foreign Earned Income Exclusion exists. For anyone not aware you don't pay taxes on 100k if you are out of the USA 330 days out of the year. 200k if you are married. Do you qualify? Then you are exempt from such a ridiculous amount that it is hard to argue this. Or maybe you visit the USA too much to qualify? In which case you do…

I do understand the annoyance. The $100k exclusion, as others have mentioned, is not a "ridiculous amount", it's all relative to where you live and how much you earn. You might also think it is "ridiculous" because you only earn money from a paycheck (e.g. you are an employee). For the self-employed things look very different: your revenue might easily be $200k, while your actual income is half that. Your foreign bus…

I will probably give up my USA citizenship at some point because of this.

Re: Switzerland in the age of automatic exchange of banking information

#106

Post by JacKTrocinskI »

USA is overreaching, European countries should stand up this crap. I'm a Polish and US Citizen and I remember a situation where I was at an airport in Poland and was not let onto a flight after presenting a valid US passport and Polish ID card to the Polish border patrol. They didn't allow me onto my flight due to lack of a Polish passport (Polish law says I need a Polish passport when travelling to the US). I called the US embassy which told me they couldn't help me because I was Polish citizen on Polish soil. In that case why should I pay taxes while abroad? Will the US come to my rescue if a war broke out or major disaster occurred? They couldn't even get me onto a flight back to the US.

I ended up getting a hotel for the night, bought a plane ticket to Germany the next day and another one from Germany to the US. I was offered a small refund for my round trip tickets from Poland to the US. Only person I could count on was myself that day.

Re: Switzerland in the age of automatic exchange of banking information

#107

Post by tallanvor »

jimhi wrote: post #87
jjcm wrote: post #58

Earlier quoted context omitted.

For myself (a US citizen living abroad), my biggest annoyance isn't that I'm taxed on my income overseas, it's that it effectively is taxation without representation. Even though I'm paying tax overseas, there's no US Representative who fights for my interests. I have one who fights for the interests of the residents of a district I lived in years ago, but I have no relation to that anymore. I have a US senator who f…

I am also a US citizen abroad and I don't understand your annoyance. This is exactly why Foreign Earned Income Exclusion exists. For anyone not aware you don't pay taxes on 100k if you are out of the USA 330 days out of the year. 200k if you are married. Do you qualify? Then you are exempt from such a ridiculous amount that it is hard to argue this. Or maybe you visit the USA too much to qualify? In which case you do…

It's much more complicated than just having a foreign income exclusion and being out of the country.

If your income is above $100k, you also have to fill out the AMT worksheet, which may result in you needing to calculate everything to deduct the foreign taxes you've paid.

If you have US stocks and sell them, you have to worry about paying capital gains taxes to the US (they consider this US income, regardless of if you received the stocks as part of your employment), and you generally have to pay taxes to the country you're living in for that as well. If you're lucky you might be able to deduct the US taxes or expected taxes, otherwise you might not be able to do so or might not be able to do so until the next year.

You also have to report your overseas accounts every year.

When I first moved overseas, yes, it was pretty simple to just fill out my 1040 and my form 2555. Last year I needed those plus the 1040 Schedule B and form 1116. Next year things will get even more complicated since this year I bought an apartment, so there's a mixture of rent deduction and mortgage deductions, plus a significant capital gains tax burden due to selling stocks for my down-payment on the apartment.

Re: Switzerland in the age of automatic exchange of banking information

#108

Post by shadowprofile77 »

I have to say that I find the attitude I quoted below from the link, ever more prevalent in today's political and social climate, to be extremely dangerous in how one-sided it is.For one thing, competition is a cornerstone of better development. Yes, it sometimes needs to be moderated but as a basic rule of anything economic, it works at delivering more and better options and keeping exploitative tendencies in check. This applies to the regulatory frameworks of countries just as much as to any other economic actor and the just as many of us would probably agree that it's a bad idea for every company in X industry to collude on fixing prices, the notion of stamping out competitive tax regimes among nation states should be looked at with the same suspicion and for the same reasons of curtailing abuse against those who have to pay for everything.

Secondly, at what point does it allow for the question of just how much government should be allowed to spend? The entire onus should not simply be placed on crushing tax avoidance, and a serious debate about the size, scope and sheer spending done by governments today needs to balance things out. This isn't an argument against social programs or helping the poor it's just a recognition of the basic fact that a tremendous amount of money extracted by states gets wasted on all sorts of immense bloat. We complain about bureaucratic mismanagement by various countries all the time but for some reason should applaud their obsessive efforts to crush any exit valves on abusive tax practices by them, and not just tax avoiders or evaders?

With the support of the G20 and the EU, the Organisation for Economic Cooperation and Development (OECD) therefore drew up international standards in 2014 to enable countries to exchange bank information automatically. More than a hundred countries have so far decided to adhere to these standards, almost half of which have already started to exchange information in 2017. Participating countries must undertake to treat the data they receive confidentially and only for tax purposes.

These rules also aim to create a level playing field for all financial centres by putting an end to tax havens. Countries - or territories - that do not meet the criteria set out in international standards or that are not cooperative are included in grey or black lists of the OECD and the EU. “Defensive measures", in other words sanctions, are envisaged against them.

Re: Switzerland in the age of automatic exchange of banking information

#109

Post by csomar »

baazaar wrote: post #3
pjc50 wrote: post #2

This is not something that Switzerland was happy to do; it took a lot of pressure to get them to stop being an asset haven for international tax avoiders.

To be precise: pressure from the US. Now the US is Switzerland.

Many people are missing this point. US banks, until this point, do not exchange information on their foreign customers. FATCA is more like: Hey Hong Kong, Swiss, London, nice business you have over there, maybe I can get in the action too. All of the action actually.

Re: Switzerland in the age of automatic exchange of banking information

#110

Post by mikro2nd »

Causality1 wrote: post #54
nradov wrote: post #18

Earlier quoted context omitted.

Swiss banks are in that position today because some of them engaged in criminal conspiracies to help US customers commit tax fraud. If they want to participate in the US financial system then they have to play by US rules. US citizens residing in other countries can still receive some services and protection from the US federal government. So it's completely fair to tax them for that. We can argue about the value of…

Multi-citizenship is a very strange concept anyway. Sure you can check the boxes and countries A and B consider you a citizen, but it's bizarre to me that one nation would let you swear loyalty to another without revoking your citizenship. The naturalization oath of allegiance, at least the American one, is very explicit about conflicts of interest like that but we've just sort of chosen not to enforce those parts of…

Citizenship is a very strange concept to me. The fact of a person being born in a specific geographic location giving the surrounding nation-state the right to claim some sort of perpetual jurisdiction over that person to the exclusion of all other nation-states seems, upon reflection, quite bizarre.
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